How Mortgage Underwriting Works
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How Mortgage Underwriting Works

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
By , Trusted Mortgage Expert with 45+ Years of Experience
Edited by Michael Jensen

Once the lender receives your complete mortgage application including all of your personal financial information and documents, your application is submitted to the lender's internal underwriter for review.  You can think of the lender's underwriter as an investigator who carefully examines your application as well as all the appraisal and title reports and all the personal and financial documents you provided.  The underwriter's goal is to make sure that the information you submitted regarding your income, assets and employment is accurate and complete and that you have the ability to afford the mortgage payment and ultimately pay back the loan.

The lender underwriting process focuses on the borrower's credit worthiness and financial profile and makes sure that applicant meets the lender's mortgage qualification guidelines. The underwriter also reviews the appraisal report to make sure there are no significant issues with the property that need to be addressed prior to closing. Additionally, the underwriter examines the title report to identify any unresolved ownership claims, easements or exceptions to title that require an explanation or resolution. In short, the underwriter represents the lender's interests and ensures that you are a qualified applicant.

The underwriter is supposed to provide an objective assessment of your application and ability to qualify for the mortgage. The lender's underwriter usually never interacts directly with the applicant and unlike a loan officer or customer-facing banker, the underwriter has no relationship with the borrower.  Additionally, the loan officer or banker usually have minimal ability to influence underwriter and push your approval through if the underwriter rejects it.  This is intentional as the underwriter is supposed to be unbiased. So although you may never talk to the underwriter assigned to review your loan application, he or she plays a very important role in the mortgage process.

Your application is assigned to one of the lender's approved underwriters who processes the file and either approves, approves with conditions or rejects your application.  If your application is rejected, the mortgage process with that lender is usually over although you can try to work with a different lender depending on the reason for the rejection.  If your mortgage application is approved, you are cleared to fund and close your loan.

The underwriter may have questions about your mortgage application or request addition documentation to provide final underwriting approval. These additional underwriter requests are referred to as "prior to document" requirements because they must be satisfied before your loan moves from the underwriting phase of the mortgage process to the funding phase. As an example, the underwriter may request additional tax returns, more extensive employment information or more detailed bank or brokerage account statements.

It is unusual for the underwriter to approve your application without requiring additional information or clarifications. In many cases the application is approved but is subject to certain conditions that must be satisfied before your mortgage closes. Conditions to close may include providing additional financial information or personal documents, explaining an issue on your credit report, addressing items in or exceptions to the title report or fixing a property issue found in the appraisal report.  As a borrower, you want resolve these conditions to close as soon as possible so that your mortgage can fund on time.

The lender underwriting review and approval process can take between three or four days to up to four weeks or more depending upon market conditions and the lender's internal process.  Additionally, a high number of follow-up questions, conditions to close or "prior to document" requirements can extend the underwriting process depending on the type of information the underwriter requests and the responsiveness of the borrower.  It is prudent to add some cushion to your mortgage timeline to account for an extended underwriting process.  Also, if you decide to lock your mortgage, make sure that your rate lock period takes into account the time required to receive lender underwriting approval.  After you have resolved all of the prior to document conditions, the underwriter provides final mortgage approval which enables you to move to closing stage of the mortgage process and ultimately fund your loan.

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Related FREEandCLEAR Resources


"Originate & Underwrite."  Single-Family Business.  Freddie Mac, 2020.  Web.

About the author
Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR.  Harry is a licensed mortgage professional (NMLS #236752). More about Harry

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